Monthly Archives: March 2015

Over the past few days, Plastic the Movie Limited has filed John Doe lawsuits against eight BitTorrent users alleging copyright infringement.

These lawsuits are ‘John Doe’ lawsuits because, at this time, the copyright holder does not know the name of the party they are accusing of infringement. Right now, all they know are the accused infringer’s IP address. From here, they copyright holders will subpoena the ISPs to determine who had the IP address at the time of the alleged infringement. Once that is determined, the copyright holders will update the lawsuits to name the correct individual.

Fortunately, most ISPs inform users before they give up their information. If you receive a letter informing you that you are the subject of a John Doe lawsuit, you should contact an attorney immediately. Damages in a copyright infringement suit are determined by statute and, if willful infringement is shown, can be as much as $150,000.00 per infringement plus opposing counsel’s attorney fees and costs. It is imperative that you act quickly to protect your rights.

At Smith & Associates, we not only understand litigation and copyright law, we understand the technology at the heart of these issues. We understand BitTorrent and the issues associated with associating an IP address to an individual. If you need help addressing this or any other copyright issue, please contact us for a free consultation.

Today, the Supreme Court handed down its decision in B&B Hardware, Inc. v. Hargis Industries, Inc.. This decision has a real impact on companies that are applying for and challenging federal trademark registrations. While the full history and details of this case have been going on for almost two decades and, according to the Court, “could fill a long, unhappy book,” the important facts are fairly straight forward. In 1993 B&B registered its trademark “SEALTIGHT” for “threaded or unthreaded metal fasteners and other related hardwar[e]; namely, self-sealing nuts, bolts, screws, rivets and washers, all having a captive o-ring, for use in the aerospace industry.” In 1996, Hargis sought to register its trademark “SEALTITE” for “self-piercing and self-drilling metal screws for use in the manufacture of metal and post-frame buildings.” Eventually in 2002, The United States Patent and Trademark Office (“USPTO”) published Hargis’s mark for opposition and B&B filed an opposition which prompted a proceeding before the Trademark Trial and Appeal Board (“TTAB”). However, B&B had also filed a trademark infringement action in the circuit court.

This is where the issue before the Court comes in. B&B was arguing before both the circuit court and the TTAB that Hargis’s mark was so similar to its mark that it would create a likelihood of consumer confusion. Before the circuit court could rule on this matter, the TTAB agreed with B&B and ruled that the marks were so similar as to cause a likelihood of consumer confusion and refused to register Hargis’s mark. Hargis did not appeal the TTAB decision. B&B then argued in front of the circuit court that since the TTAB has already ruled on likelihood of confusion, that decision should apply to the circuit court and that Hargis should not be able to raise the defense that there is no likelihood of confusion. This is called claim preclusion, when once Court rules on an issue, other Courts are bound by that ruling. Today’s Supreme Court decision confirms that B&B is correct and that TTAB rulings would prevent those same issue from being argued in circuit court.

Hargis’s decision not to appeal the TTAB ruling, in effect, bound it to the ruling for any subsequent lawsuits. This is important. Proceedings before the USPTO can have a preclusionary effect. Hargis, by not appealing the TTAB decision, is now precluded from arguing one of its main defenses.

This ruling enforces that issues before the USPTO are serious matters that should not be taken lightly. If you have a trademark issue, contact the professionals at Smith & Associates for a free consultation.

Pelletier worked as an emergency medical technician for the defendant Liberty Ambulance Service. He claims that the defendants routinely “omitted and/or misrepresented the medical condition of the patient being transported… on the certificate of medical necessity.” This, he claims, allowed Liberty Ambulance Services to bill Medicare and Medicaid at a higher rate and allowed the hospital defendants to “discharge and transport patients without costs.” He is asking that the Court impose damages in the amount of “three times the damages to the Federal Government and civil penalties of no more than Eleven Thousand Dollars ($11,000.00) and no less than Five Thousand Dollars ($5,000.00) for each false claim[.]” These damages are provided by statute. The government will receive the majority of this money, but Pelletier, as the relator, will receive between 15 and 25 percent of that award.

According to a notice by the government, also unsealed today (which can be read here), the government has reached a settlement with the defendant hospitals, but no settlement has been reached with Liberty Ambulance Service and the government is intervening in the case against Liberty.

Qui Tam and False Claims Act lawsuits are complex matters that require an in-depth knowledge of Medicare and Medicaid along with the specific provisions of the False Claims Act. If you have been notified by the government that you are under investigation for a violation of the False Claims Act, you need experienced and knowledgeable attorneys protecting your rights. At Smith & Associates, we understand Medicare and Medicaid billing and the requirements imposed on healthcare providers. Our experienced litigators will fight aggressively for you.

If you are an employee in the health care industry and you are aware of improper government billing, our experienced healthcare attorneys can help you evaluate your claim and help you receive between 15 and 25% of any recovery the government obtains.

In 1999 and 2001, the Department of Labor’s Wage and Hour Division issued letters opining that mortgage-loan officers do not qualify for the administrative exemption to overtime pay requirements under the Fair Labor Standards Act of 1938. In 2004, the Department issued new regulations regarding the exemption. Respondent Mortgage Bankers Association (MBA) requested a new interpretation of the revised regulations as they applied to mortgage-loan officers, and in 2006, the Wage and Hour Division issued an opinion letter finding that mortgage-loan officers fell within the administrative exemption under the 2004 regulations. In 2010, the Department again altered its interpretation of the administrative exemption. Without notice or an opportunity for comment, the Department withdrew the 2006 opinion letter and issued an Administrator’s Interpretation concluding that mortgage-loan officers do not qualify for the administrative exemption.

While the majority of the opinion revolves around a government agency’s ability to interpret its own rules, the impact to the Mortgage Bankers Association (“MBA”) is that mortgage-loan officers are now subject to the overtime provisions of the FLSA. However, as the Court points out, the MBA would have a defense to any FLSA liability that occurred before the agency reversed its interpretation.

As amended by the Portal–to–Portal Act of 1947, 29 U.S.C. § 251 et seq., the FLSA provides that “no employer shall be subject to any liability” for failing “to pay minimum wages or overtime compensation” if it demonstrates that the “act or omission complained of was in good faith in conformity with and in reliance on any written administrative regulation, order, ruling, approval, or interpretation” of the Administrator of the Department’s Wage and Hour Division, even when the guidance is later “modified or rescinded.” §§ 259(a), (b)(1).

Id.

This shows why it is important for employers to not only understand the FLSA, but the rules and interpretations promulgated by the Department of Labor. By understanding and following these rules, interpretations, and opinions, an employer reduce its potential FLSA liability. At Smith & Associates, we provide all aspects of Employment Related Legal Representation to Employers including: Compliance Review, Litigation, Appeals, Employment Contracts, Handbook and Policy Drafting, and Unemployment Appeals. If you need held with employment related law issues, contact us for a free consultation.

As predicted yesterday, Manny Fillm, LLC has filed more John Doe copyright infringement lawsuits. 11 more lawsuits have been filed so far today claiming that BitTorrent users downloaded the film Manny, a movie about boxer Manny Pacquiao. If you receive a letter informing you that you are the subject of a John Doe lawsuit, you should contact an attorney immediately. Damages in a copyright infringement suit are determined by statute and, if willful infringement is shown, can be as much as $150,000.00 per infringement plus opposing counsel’s attorney fees and costs. It is imperative that you act quickly to protect your rights.

At Smith & Associates, we not only understand litigation and copyright law, we understand the technology at the heart of these issues. We understand BitTorrent and the issues associated with associating an IP address to an individual. If you need help addressing this or any other copyright issue, please contact us for a free consultation.

Petitioner argued that the process was flawed because it did not include any meeting to “normalize” the scores of the evaluators to eliminate bias or arbitrary scoring. Held: Such argument could only be raised within 72 hours of issuing RFP, and was therefore waived.

Petitioner argued to disregard scoring of one evaluator as either biased or arbitrary and irrational. Held: The scoring was not show to be arbitrary, capricious, dishonest, or illegal. However on one item, the ALJ did find the scoring to be “outside the range of reasonable” and determined by how many points it deviated from a reasonable score. “The ALJ may not revise fraudulent or random scores” … but the ALJ may revise scores that are merely outside the range of reasonable, if sufficient evidence exists….”

Petitioner argued that failure to include a detailed and itemized cost proposal rendered the proposal Non Responsive to RFP.

Held: Failure to include a detailed written narrative was a minor irregularity that could be waived, because failure to include was not shown to provide any type of competitive advantage.

Petitioner argued that low bid was not responsive to mandatory items in the RFP and should have been disqualified, but instead FDOT asked for additional clarifying information from the low bidder after the proposals were opened.

Held: It was error to award to low bidder when mandatory items were missing from bid. A clarification process cannot be used to amend a bid and include missing mandatory information.

This case involved a “Request for Qualifications” for a construction management at risk at a local high school. The Petitioner was selected as the party for negotiating a contract after a solicitation and evaluation process. After two years of negotiations, the School Board announced its intention to reject all responses and to “hard bid” the project.

Arguments raised and holdings:

The Petitioner argued that it was arbitrary and capricious and contrary to competition to withdraw the RFQ and re-bid after investment of nearly two year in the process.

Held: The withdrawal was not shown to be arbitrary or capricious, but was instead a well reasoned decision based on changed economic circumstances, including the opportunity to save substantial taxpayer dollars in a re-bid. Cites long line of decisions as to public interest in saving tax dollars.

School Board awarded a contract to a construction contractor, Wharton-Smith, Inc. which required use of competitive procurement of subcontractors. An electrical subcontractor filed a Petition against the School Board when Wharton-Smith selected another vendor for the subcontract work.

Arguments raised and holdings:

Petitioner argued that School Board had elected to retain complete control over the construction work and expenditures by its contractor, and therefore a challenge to the decision of the Contractor to award work to another sub-contractor was proper. Held: The Contractor was not an agent of the School Board, and was a private company that took the action which Petitioner sought to challenge. The fact that School Board retained oversight of the process, and ability to review, did not render it an Agency decision subject to challenge in a 120.57 hearing. Case dismissed.

Lee County School Board issued an RFP for a dental insurance carrier. After receiving and reviewing proposals, and posting the intent to award to Humana, the School Board decided to reject all proposals. Humana appealed.

Arguments and holdings:
Petitioner argued that the decision to reject all bids was arbitrary.

Held:

Procedural errors in the bid process were fatal including:

Allowing the proposers to supply missing information after the proposals were opened.

Requesting information from various vendors after the proposals were opened.

Allowing the top three proposals to amend their proposals by submitting different type of product not specified in the RFP.

Direct lobbying by representatives of one vendor during the evaluation process.

AHCA issued an Invitation to Negotiate (ITN) for Medicaid utilization and peer review services. The incumbent vendor lost in the evaluation process even though it was a lower price proposal by over $12 million.

Arguments raised and holdings:

Petitioner argued that the selection of the higher priced vendor was arbitrary and illogical and that the scoring of the evaluators could not be justified. Held: Selection of the higher priced bidder was justified. AHCA believed that the incumbent was “low balling” its bid, and this finding was not shown to be clearly erroneous, and evidence supported that some the price components did not appear reasonable.

Petitioner argued that the proposed award did not include a specific written finding of why the selected vendor provided the best value to the state. Held: Issue was premature as AHCA had not yet awarded the contract, and ALJ implied finding could be made upon the award, rather than intent to award. Further, ALJ noted that statutory amendments made after the ITN was issued did not apply to the procurement.

To the extent there was any inherent challenge to the ITN suggested, ALJ noted that nobody challenged any terms of conditions of ITN and therefore any such issue was waived.

Department of Juvenile Justice issued an RFP for a contract to provide Intensive Delinquency Diversion Services. The RFP sought responses for different geographic areas (Circuits) in the state in one document, rather than issuing separate RFPs for each circuit.

Arguments and holdings:

Petitioner had argued that it was an error to issue the RFP for different circuits with different specific local conditions in one RFP. Held: This argument amounts to a challenge to the RFP specifications which was not made within 72 hours of the RFP being issued and was therefore waived.

Petitioner argued that one evaluator was not qualified because she had no specific experience with the type of service being sought.

Held: Although the one evaluator did not have specific experience with Intensive Delinquent Diversion Services, and had never served as an RFP evaluator previously, she was familiar with these services and was properly educated and trained to serve as an evaluator.

Petitioner challenged some scoring of evaluators as arbitrary, and provided evidence of evaluators changing their scores without written explanation as evidence of arbitrary scoring.

Held: Scoring was not shown to be arbitrary, and changes showed a thoughtful process even if no written explanation provided.

Department of Juvenile Justice issued an RFP for a contract to provide Intensive Delinquency Diversion Services. Petitioner brought challenge primarily based upon alleged lack of experience of one evaluator.

Held: Even though the evaluator lacked specific direct experience in the program area, she had enough experience and exposure to the program to serve as an evaluator.

The School Board issued a Request for Qualifications on a construction manager at risk contract for renovation at two elementary schools.

Arguments raised and holdings:

Petitioner argued that the RFQ included a specific requirement that a Professional Services Advisory Committee of the School Board would evaluate certain performance data on file, and that this requirement was not met because the Committee did not maintain such data. Therefore, the Petitioner argued that the School Board deviated materially from the RFQ specifications.

Held: Lack of data was not shown to have any affect on the outcome, and therefore not fatal.

Petitioner also advanced theories for scoring irregularities, such as inconsistency in how long a period of prior work experience was examined for each vendor. Held: Petitioner did not show this to have any impact. “The few instances of arbitrary scoring were actually proved to be too few in number to have any material impact on the average scores.”
Petitioner argued that campaign contributions to various school board members resulted in biased evaluations by these members.

Held: Legal campaign contributions were not proven to have any affect on the scoring.

Petitioners argued that a Sunshine Act violation occurred because the meeting of the Public Service Advisory Committee was not properly noticed.

Held: It appeared that a Sunshine Act violation did in fact occur, but ALJ found that the Petitioner failed to prove any adverse impact from this violation. In fact, the Petitioner actually benefited by being one of the firms selected to advance to further round of evaluations. ALJ noted that enforcement of the Sunshine Act in circuit court is different than raising this issue in a bid protest. In the former case, action can be set aside merely because the violation occurred. But in an administrative hearing, the party alleging the violation must still show adverse impact.

Department of Juvenile Justice issued an RFP for Community Based Intervention Services in Brevard County. The RFP included a requirement for proposer to include a “recidivism rate” for past performance in similar contracts. The RFP did not specify the method of calculating the recidivism rate. The Department’s evaluators applied a long standing scoring method and calculation that used an Average recidivism rate when the proposer had experience in more than one county or judicial circuit.

Arguments raised and holdings:

Petitioner argued that the scoring was not proper because the Department used a calculation methodology that was not disclosed in the RFP. Held: Even though it was not stated in the RFP, the calculation using an “Average” recidivism rate had been the Department’s prior policy and proposer was aware of this, and did not challenge the lack of clear methodology within 72 hours of the RFP being issued. Therefore, issue of unclear specification was waived, and it was not arbitrary or capricious to use the long standing prior policy.
Petitioner argued that it was arbitrary to use the Averaging methodology because the Department had in subsequent RFP clarified that it would no longer use the Averaging methodology.

Held: Subsequent RFP terms did not apply. Not shown that using prior method, in accordance with long standing policy, was arbitrary or capricious or contrary to RFP Specifications or policy of the Department. It would have been error to apply the new policy without announcing it in the RFP. If proposer wanted clarification, then should have challenged the RFP. Same method was applied to all proposers, and therefore it was not shown to be anti-competitive.

Petitioner argued that the process was flawed because it did not include any meeting to “normalize” the scores of the evaluators to eliminate bias or arbitrary scoring.

Held: Such argument could only be raised within 72 hours of issuing RFP, and was therefore waived.

Petitioner argued to disregard scoring of one evaluator as either biased or arbitrary and irrational.

Held: The scoring was not show to be arbitrary, capricious, dishonest, or illegal. However on one item, the ALJ did find the scoring to be “outside the range of reasonable” and determined by how many points it deviated from a reasonable score. “The ALJ may not revise fraudulent or random scores” … but the ALJ may revise scores that are merely outside the range of reasonable, if sufficient evidence exists….”

Petitioner argued that failure to include a detailed and itemized cost proposal rendered the proposal Non Responsive to RFP.

Held: Failure to include a detailed written narrative was a minor irregularity that could be waived, because failure to include was not shown to provide any type of competitive advantage.

Petitioner argued that low bid was not responsive to mandatory items in the RFP and should have been disqualified, but instead FDOT asked for additional clarifying information from the low bidder after the proposals were opened.

Held: It was error to award to low bidder when mandatory items were missing from bid. A clarification process cannot be used to amend a bid and include missing mandatory information.

This case involved a “Request for Qualifications” for a construction management at risk at a local high school. The Petitioner was selected as the party for negotiating a contract after a solicitation and evaluation process. After two years of negotiations, the School Board announced its intention to reject all responses and to “hard bid” the project.

Arguments raised and holdings:

The Petitioner argued that it was arbitrary and capricious and contrary to competition to withdraw the RFQ and re-bid after investment of nearly two year in the process.

Held: The withdrawal was not shown to be arbitrary or capricious, but was instead a well reasoned decision based on changed economic circumstances, including the opportunity to save substantial taxpayer dollars in a re-bid. Cites long line of decisions as to public interest in saving tax dollars.

School Board awarded a contract to a construction contractor, Wharton-Smith, Inc. which required use of competitive procurement of subcontractors. An electrical subcontractor filed a Petition against the School Board when Wharton-Smith selected another vendor for the subcontract work.

Arguments raised and holdings:

Petitioner argued that School Board had elected to retain complete control over the construction work and expenditures by its contractor, and therefore a challenge to the decision of the Contractor to award work to another sub-contractor was proper.

Held: The Contractor was not an agent of the School Board, and was a private company that took the action which Petitioner sought to challenge. The fact that School Board retained oversight of the process, and ability to review, did not render it an Agency decision subject to challenge in a 120.57 hearing. Case dismissed.

Lee County School Board issued an RFP for a dental insurance carrier. After receiving and reviewing proposals, and posting the intent to award to Humana, the School Board decided to reject all proposals. Humana appealed.

Arguments and holdings:

Petitioner argued that the decision to reject all bids was arbitrary.

Held:

Procedural errors in the bid process were fatal including:

Allowing the proposers to supply missing information after the proposals were opened.

Requesting information from various vendors after the proposals were opened.

Allowing the top three proposals to amend their proposals by submitting different type of product not specified in the RFP.

Direct lobbying by representatives of one vendor during the evaluation process.

AHCA issued an Invitation to Negotiate (ITN) for Medicaid utilization and peer review services. The incumbent vendor lost in the evaluation process even though it was a lower price proposal by over $12 million.

Arguments raised and holdings:

Petitioner argued that the selection of the higher priced vendor was arbitrary and illogical and that the scoring of the evaluators could not be justified.

Held: Selection of the higher priced bidder was justified. AHCA believed that the incumbent was “low balling” its bid, and this finding was not shown to be clearly erroneous, and evidence supported that some the price components did not appear reasonable.

Petitioner argued that the proposed award did not include a specific written finding of why the selected vendor provided the best value to the state.

Held: Issue was premature as AHCA had not yet awarded the contract, and ALJ implied finding could be made upon the award, rather than intent to award. Further, ALJ noted that statutory amendments made after the ITN was issued did not apply to the procurement. To the extent there was any inherent challenge to the ITN suggested, ALJ noted that nobody challenged any terms of conditions of ITN and therefore any such issue was waived.

Department of Juvenile Justice issued an RFP for a contract to provide Intensive Delinquency Diversion Services. The RFP sought responses for different geographic areas (Circuits) in the state in one document, rather than issuing separate RFPs for each circuit.

Arguments and holdings:

Petitioner had argued that it was an error to issue the RFP for different circuits with different specific local conditions in one RFP.

Held: This argument amounts to a challenge to the RFP specifications which was not made within 72 hours of the RFP being issued and was therefore waived.

Petitioner argued that one evaluator was not qualified because she had no specific experience with the type of service being sought.

Held: Although the one evaluator did not have specific experience with Intensive Delinquent Diversion Services, and had never served as an RFP evaluator previously, she was familiar with these services and was properly educated and trained to serve as an evaluator.

Petitioner challenged some scoring of evaluators as arbitrary, and provided evidence of evaluators changing their scores without written explanation as evidence of arbitrary scoring.

Held: Scoring was not shown to be arbitrary, and changes showed a thoughtful process even if no written explanation provided.

Department of Juvenile Justice issued an RFP for a contract to provide Intensive Delinquency Diversion Services. Petitioner brought challenge primarily based upon alleged lack of experience of one evaluator.

Held: Even though the evaluator lacked specific direct experience in the program area, she had enough experience and exposure to the program to serve as an evaluator.

The School Board issued a Request for Qualifications on a construction manager at risk contract for renovation at two elementary schools.

Arguments raised and holdings:

Petitioner argued that the RFQ included a specific requirement that a Professional Services Advisory Committee of the School Board would evaluate certain performance data on file, and that this requirement was not met because the Committee did not maintain such data. Therefore, the Petitioner argued that the School Board deviated materially from the RFQ specifications. Held: Lack of data was not shown to have any affect on the outcome, and therefore not fatal.Petitioner also advanced theories for scoring irregularities, such as inconsistency in how long a period of prior work experience was examined for each vendor.

Held: Petitioner did not show this to have any impact. “The few instances of arbitrary scoring were actually proved to be too few in number to have any material impact on the average scores.”

Petitioner argued that campaign contributions to various school board members resulted in biased evaluations by these members.

Held: Legal campaign contributions were not proven to have any affect on the scoring. Petitioners argued that a Sunshine Act violation occurred because the meeting of the Public Service Advisory Committee was not properly noticed.

Held: It appeared that a Sunshine Act violation did in fact occur, but ALJ found that the Petitioner failed to prove any adverse impact from this violation. In fact, the Petitioner actually benefited by being one of the firms selected to advance to further round of evaluations. ALJ noted that enforcement of the Sunshine Act in circuit court is different than raising this issue in a bid protest. In the former case, action can be set aside merely because the violation occurred. But in an administrative hearing, the party alleging the violation must still show adverse impact.

Department of Juvenile Justice issued an RFP for Community Based Intervention Services in Brevard County. The RFP included a requirement for proposer to include a “recidivism rate” for past performance in similar contracts. The RFP did not specify the method of calculating the recidivism rate. The Department’s evaluators applied a long standing scoring method and calculation that used an Average recidivism rate when the proposer had experience in more than one county or judicial circuit.

Arguments raised and holdings:

Petitioner argued that the scoring was not proper because the Department used a calculation methodology that was not disclosed in the RFP.

Held: Even though it was not stated in the RFP, the calculation using an “Average” recidivism rate had been the Department’s prior policy and proposer was aware of this, and did not challenge the lack of clear methodology within 72 hours of the RFP being issued. Therefore, issue of unclear specification was waived, and it was not arbitrary or capricious to use the long standing prior policy.

Petitioner argued that it was arbitrary to use the Averaging methodology because the Department had in subsequent RFP clarified that it would no longer use the Averaging methodology.

Held: Subsequent RFP terms did not apply. Not shown that using prior method, in accordance with long standing policy, was arbitrary or capricious or contrary to RFP Specifications or policy of the Department. It would have been error to apply the new policy without announcing it in the RFP. If proposer wanted clarification, then should have challenged the RFP. Same method was applied to all proposers, and therefore it was not shown to be anti-competitive.

Department of Juvenile Justice issued an RFP for a contract to provide Adult Day Treatment Services in a facility setting. Two vendors responded. At issue was the scoring on past performance.

Arguments raised and held:

Petitioner argued that in scoring of the winning proposal, evaluators improperly awarded points to the competing vendor for a program that was not truly a “non residential” program.

Held: The RFP included a clear footnote that the specific type of program considered, would be considered in evaluation of past performance. Disappointed proposer failed to raise any challenge to this specification within 72 hours of the RFP being issued, and the issue was therefore waived.

Petitioner argued a Sunshine Act violation in that members of the Department met with the Petitioner after the notice of protest without public notice and without meeting minutes, and further met privately amongst themselves to discuss the protest.

Held: No decisions or recommendations were made by the staff members, and therefore this group of staff was not a Board or Commissioner subject to Sunshine Act.

School Board issued an Invitation to Bid on two painting project jobs. The ITB included a “Revised Bid Summary Sheet” which included spaces to state the bid price and bidder name and address, but did not include a specific signature line on the form. However, in the Instructions in the ITB there was indication that any revised bid summary sheet was to be “executed.” Only 1 bidder signed the form for one job and only 2 bidders signed for the other job. Upon review, the School Board proposed to reject all bids.

Arguments raised and holdings:

Petitioner argued that it was lowest responsive bid, and that failure to include signatures was not a material variance warranting rejection of bids.

Held by ALJ: The ITB was not clear as to whether signature was required. “Execution” of the Revised Bid Summary Sheet could mean filling out the form as all the bidders did. Lack of a signature did not provide any material advantage to any bidder, and did not affect the prices that were bid. It would be contrary to competition to re-bid, and would unnecessarily expend and waste taxpayer dollars to re-bid when there was fair competition.

Ultimate Holding: School Board overturned the ALJ, and held that lack of signatures was a material variance from the ITB which required the sheets to be executed, and common understanding is that this means the sheets must be signed.

FDOT issued an RFP for emergency towing services on I-95 in Martin, St. Lucie, and Indian River Counties. Sunshine Towing was lower priced — but Anchor Towing received slightly higher scoring, and proposed award to Anchor was made. The RFP specifically required that the proposer include “occupational licenses” for past three years.

Arguments made and holding:

Petitioner argued that the failure to include the required occupational licenses was a fatal error that rendered the proposal non-responsive, and the proposer was therefore not a responsible or qualified proposed.

Held: The ALJ noted the differences between a “minor irregularity” (those deviations from a requirement that provides no advantage in competition or in price) in a bid or proposal that can be waived, and a material variance that cannot be waived. The ALJ also noted that “gatekeeper” type of provisions that address the qualifications of the proposer should rarely if ever be waived — because these type of provisions are intended to winnow the field of possible bidders or proposer. However, under the specific facts, the ALJ found that the requirement was ambiguous because there was no longer an applicable “occupational license” when the proposals were submitted, because the local requirement was replaced with a simple “business tax receipt.” The ALJ concluded that the Agency’s determination that the requirement was “minor irregularity” was not a “clearly erroneous” decision. The decision indicates that the ALJ deferred to the Agency only on the basis of the strict standard of proof (“clearly erroneous”) required in bid protest cases, and that he otherwise agreed that the type of missing information should have been considered material.

The Commission issued an RFP for Non Emergency Medicaid Transportation (Medicaid NET) services in multiple counties. TMS challenged the proposed award to MV Contract Transportation, Inc. in Palm Beach and Duval Counties. Issue involved the scoring or proposal of the winning proposer (MV) by taking into consideration the Parent Company’s financial strength and resources. Evaluators testified during hearing that they had not reviewed the content of the RFP except for one Evaluator who had only skimmed the contents.

Arguments and holdings:

Petitioner TMS argued that MV should be disqualified because it did not clearly and properly spell out who was the prime vendor, and Evaluators improperly scored the proposal based on the financial strength, experience and resources of the parent company, rather than the entity that actually submitted the proposal.

Held: MV filed a faulty proposal by failing to clearly identify the prime contractor to be scored, and relied upon the experience and solvency of its parent organization; the RFP required that only the “prime vendor’s” experience and solvency should be considered and scored; the Evaluators failed to read the RFP and scored erroneously, not in accordance with the terms of the RFP; and that accordingly the MV proposal should be disqualified. Respondent MV argued that the TMS Joint Venture suffered the same defect as to not properly identifying a prime vendor but instead relying upon the experience and solvency of the two different legal entities that constituted the joint venture. However, the ALJ found that both the joint venturers would be fully liable under the contract, and they would in fact be the “prime vendor,” and therefore their combined experience could be considered. This was based on Florida law as to liability of parties to a joint venture. By contrast, MV parent company would not be liable for the acts of its subsidiary that submitted the proposal.

Epilogue: After the final hearing, the parties entered into a Settlement and agreed to split the contract awards with MV being awarded Palm Beach County and TMS Joint Venture being awarded the Duval contract.

Bid protests and bid protest law in Florida and challenges to competitive contract procurement and awards in Florida are controlled by a myriad of unique and complex statutes, rules, policies, and law. They proceed on an extremely fast track, and important rights can be waived if not immediately asserted. For example, challenges to final bid specifications, as well as any challenge to the final award, must be filed within only 72 hours of publication of the specifications or posting of the award. For these and other reasons, it is especially important to know your rights when your company becomes involved in any public procurement. Consideration should be given to retaining experienced Florida bid protest counsel early in the process to review bid specifications, assist in the Q&A process, analyze the proposal to assure responsiveness, and generally assure you a full and fair opportunity to prevail. At a minimum, if the need to file (or defend against) a bid protest arises, an experienced Florida bid protest counsel should be retained to fully protect your rights.

This memorandum provides an overview as to the process, rights, and key issues involved with state agency competitive procurements in Florida. However, similar timing issues, rules, and case law typically apply to federal agency purchasing, and local government and other publicly funded competitive procurements.

General Purpose of Competitive Procurement Requirements

Florida’s competitive procurement process is aimed at the protection of the public against collusive contracts, fraud, bias, and favoritism. Among other things, it is designed to secure fair competition on equal terms to all bidders, to secure the best values at the lowest possible expense, to provide an opportunity for an exact comparison of bids, and to assure that the most responsive bid is accepted. Wester v. Belote, 103 Fla. 976, 138 So. 721 (1931).

Florida Statutory Thresholds and Types of Procurement

Pursuant to Section 287.017 (purchasing threshold categories) and Section 287.057 (procurement methods) when a state agency wishes to contract for commodities or contractual services that cost in excess of $25,000, the agency must use one of several types of procurement methods. The three most common methods are: Invitation to Bid (ITB), Request for Proposal (RFP), and Invitation to Negotiate (ITN).

The ITB is used when the agency is capable of specifically defining the scope of work for which a contractual service is required or is capable of establishing the precise specifications defining the commodities sought. In an ITB process, price is king, and the lowest responsive and responsible bidder must be awarded the contract. Under Section 287.057, Florida Statutes, an ITB is the preferred method for state agencies to obtain goods and services. In order to use an RFP rather than an ITB, the agency must make a finding, in writing, that use of an ITB, where price is the deciding factor, is not practicable. If a company is concerned with a situation where an agency issues an RFP, rather than using an ITB where the lowest bidder is entitled to the contract award, then arguably a protest challenge must be filed within 72 hours of the issuance of the RFP or the ability to challenge the award is waived. This is a frequent problem in competitive procurements, as a disappointed party in responding to an RFP will argue that the state agency should have awarded the contract to the lowest price proposal.

In contrast to an ITB, the RFP is used when the agency determines, in writing, an ITB is not practicable including when the agency is seeking competitive offers for proposed commodities or contractual services to evaluate who best meets certain specifications and qualifications of the solicitation. Unlike the ITB process, under an RFP the agency is not required to award the contract to the lowest bidder, but instead it may be awarded to the most responsible offeror considering price as well as other criteria. Section 287.057(2)(a), Florida Statutes, mandates that price must be one of the criteria for evaluation, but it is not the controlling criteria.

An ITN is a written solicitation that calls for responses to select one or more persons or entities with which to commence negotiations and can only be used when the agency determines, in writing, that use of an ITB or RFP will not result in the best value to the state based on factors such as price, quality, design, and workmanship. Again, a party who believes that use of an ITN will not result in a competitive award, must assert a challenge within 72 hours of issuance of the ITN, or the ability to argue that the state should have used an RFP or ITB will likely be waived.

Other less common procurement methods are also available to agencies under specified conditions as defined in Chapter 287, including a request for quote (RFQ), emergency purchases, and single source purchases. In addition, there are special provisions that apply to the procurement of certain commodities and services such as insurance, architectural and engineering services, and information technology.

The 72-Hour and 10-Day Protest Deadlines. Vendors (bidders, proposers) should initially be aware of the distinction between challenges to the published bid specifications versus challenges to the ultimate award of the bid itself. As to each, a separate 72-hour deadline applies. If a bidder wishes to challenge the terms, conditions, or specifications contained in the solicitation (including any provisions governing the methods for ranking bids, awarding contracts, reserving rights for further negotiation, or modifying or amending any contract) the notice of protest must be filed within 72 hours after posting of the solicitation. This is extremely important for vendors responding to a solicitation to consider. One of the most common problems in public procurement is that a vendor fails to challenge the specifications or criteria in an ITB or RFP although the vendor believes that a particular criteria or specification is unfair, unnecessary, or one that the vendor simply cannot meet. (This is often rationalized by the vendor as an effort to remain on good terms with the contracting agency – i.e., seeking to avoid an action that would irritate the contracting agency.) The use of criteria or specifications that are biased towards an incumbent contractor, or towards a vendor preferred by the state agency in question, is illegal, but nevertheless is a historic and fairly frequent problem in the public procurement arena. If a vendor believes that any part of the RFP is suspect, they must file the required notice within 72 hours or the issue is forever waived.

If a bidder or proposer wishes to challenge any agency decision (an award) or intended decision (or intended award) a notice of protest must be filed with 72 hours of posting of the notice of decision or intended decision. § 120.57(3)(b), Fla. Stat. Intervening holidays and weekends are excluded in computing each of these 72-hour period. All parties who submitted a response to an ITB or RFP are entitled to a fair notice explaining their protest rights, and failure of the state agency to provide proper notice may extend the time for filing a notice of protest.

Subsequent to the filing of any protest, a formal written protest must be filed within 10 days after the notice of protest is filed. Intervening holidays and weekends are counted in computing this 10-day period. This formal written protest must state with particularity the facts and law upon which the protest is based, and is often an extensive legal document containing supporting arguments, authorities, and evidentiary exhibits. Per the statute, failure to timely file the 72-hour notice of protest or the 10-day formal written protest, will constitute a waiver of the right to protest. See also Capeletti Bros. v. DOT, 499 So. 2d 855 (Fla. 1st DCA 1986) (72-hour period); Xerox v. DPR, 489 So. 2d 1230 (Fla. 1st DCA 1986) (10-day period). Although the deadlines are not strictly “jurisdictional,” late filing will be excused only in extraordinary situations such as where the agency fails to disclose conditions in the solicitation specifications, or where agency action or inaction substantially contributed to or caused the late filing. Jacksonville Port Auth. v. Parkhill-Goodloe Co, 362 So. 2d 1009 (Fla. 1st DCA 1978).

Bid Protest Bond. Protestors must generally file a bond payable to the agency as required by Section 287.042(2)(c), Florida Statutes, and Rule 28-110.005 Florida Administrative Code, in an amount equal to 1 percent of the estimated contract amount. Failure to timely file a required bond within the time provided will also result in a waiver of the right to protest. The bond is to cover costs, since the losing party in a bid protest is responsible for paying the prevailing party’s costs and charges (but not attorney’s fees). Attorney’s fees are sometimes separately sought and awarded in cases where a protest is found to be “frivolous” or filed for “improper purposes” as defined by statutes and controlling case law.

Protest Stays the Bid Process. Filing of a timely formal protest stops the bid process and no final award of a contract may be made before entry of a final order after resolution of the protest, unless the agency head sets forth in writing particular circumstances which require the continuance of the process in order to avoid an immediate and serious danger to the public health, safety, or welfare. Fla. Stat. § 120.57(3)(c).

Settlement Period. Prior to forwarding a protest to DOAH for hearing, Florida’s APA requires that the agency must allow seven days, excluding weekends and holidays, to provide an opportunity for the parties to resolve the protest without hearing by mutual agreement of the parties. This is a prime opportunity to resolve any dispute early on and avoid the cost of continued litigation. Whether a vendor is the winning bidder, or a challenger to the proposed award of a contract, they should monitor the settlement process closely, and should demand that the state agency keep them advised of any and all meetings, discussions, correspondence, or contacts by other parties. It is probably best legal practice for an interested vendor to file a Notice of Appearance and Motion to Intervene with the state agency during the settlement period, so that there is no ambiguity as to the party asserting its rights to be part of all Settlement discussions.

Any decision of the agency to change its proposed award or to reject all bids or proposals as a result of the discussions in the settlement period must include a new Notice of rights, and opportunity for parties to file a challenge to the new agency action. Although there does not appear to be any reported cases, it is arguable that any Settlement entered by the state agency that does not include all parties who responded to the ITB or RFP is illegal – as Section 120.57(3)(c), Florida Statute, mandates that the contract award process be stopped once a bid protest is filed, unless there is a documented emergency situation – or unless there is a settlement – which implies a resolution among all interested parties.

Standing to Protest

Section 120.57(3) provides that any person who is “adversely affected” by the agency action may file a protest. While a second ranked low bidder has standing to challenge an award to the low bidder based on non-responsiveness and other factors, a third or lower ranked bidder generally does not have standing, since even if successful in the protest of the award to the low bidder, the award would then go to the second ranked low bidder. Preston Carroll v. Florida Keys Aqueduct Auth., 400 So. 2d 524 (Fla. 3d DCA 1981). Nevertheless, the third or even fourth low bidders can sometimes have standing such as where all higher ranked bidders are also challenged, or where the procurement process was fundamentally flawed requiring a full rebidding. See, e.g., NCS Pearson, Inc. v. Dept. of Education, Case No. 04-3976, 2005 WL 310776 at ¶¶ 85-87 (DOAH Feb. 8, 2005; F.O. Feb. 22, 2005) (third-lowest bidder had standing based on challenge to fundamental fairness of procurement process). Absent special and extraordinary circumstances, non-bidders do not have standing. Fairbanks v. DOT, 635 So. 2d 59 (Fla. 1st DCA 1994) (standing found because the bid specifications effectively limited the source of materials to one specific manufacturer).

Common Grounds for Protests

The grounds for a valid bid protest tend to be fact-specific and vary broadly with the circumstances and requirements of each particular procurement. But in general, the following is a listing of some of the more common categories of grounds for protest that commonly arise in bid protest cases.

Sunshine Act Violations. Pursuant to Florida’s “sunshine law,” all meetings of any state agency at which official acts may be taken must be conducted as open, public meetings. Absent that, any action taken during such meetings is improper. The result is that the agency’s action is void and can be given no effect. See § 286.011, Fla. Stat.; Silver Express Co. v. District Board of Lower Tribunal Trustees of Miami-Dade Community College, 691 So. 2d 1099, 1100-01 (Fla. 3rd DCA 1997) (determining that a committee which helped crystallize the ultimate decision to be made by a college as to the award of a contract must be conducted openly and publicly). Among other things, to comply with the Sunshine law, all general meetings of a procurement evaluation committee should be publically noticed, and open to the public. Discussions or communications between members of the evaluation committee with respect to the procurement should not occur in private (though there are certain exceptions as to ITNs). Thus, any situation that involves private discussions among two or more evaluation committee members about the scoring or evaluations that are held outside a properly noticed public meeting are prohibited and would be a basis to challenge a contract award. (This can include communications among the members of the evaluation committee or others involved in the ultimate contract award such as email correspondence or inter-office memoranda.)

Improper Ex Parte Communications. Per Chapter 287, Florida Statutes, communications between those responding to the solicitation and the procuring agency and staff are prohibited during a “black out” period (basically from the release of the solicitation to the end of the 72-hour protest period) from communicating with anyone at the agency other then in writing to the procurement officer. Violation of this requirement may be grounds for rejecting a response.

Non-Responsive Bids: Material Variances vs. Minor Irregularities. Whether a mistake, deviation, or variance in a bid will be considered material (so as to deem the bid non-responsive) or a minor irregularity (that can be waived by the agency) is a highly technical question, and depends on the facts and circumstances of each case. To be responsive, a bid or proposal must conform in all “material” respects to the solicitation. § 287.012(25), Fla. Stat. There is a large body of case law as to what constitutes a minor irregularity versus a material variance from specifications, but generally, a material variation is one which: (1) affects the price of the bid; (2) gives the bidder an advantage or benefit not enjoyed by other bidders; or (3) adversely impacts the interests of the procuring agency. Intercontinental Properties, Inc. v. HRS, 606 So. 2d 380 (Fla. 3d DCA 1992). Material deviations or changes include those that involve fraud or misconduct, or that provide a bidder with an unacceptable or material competitive advantage. See Liberty City v. Asphalt & Concrete, 421 So. 2d 505 (Fla. 1982). In general, the test for measuring whether a deviation in a bid is sufficiently material to destroy its competitive character is whether it affects the amount of the bid by giving the bidder an advantage not enjoyed by other bidders. Harry Pepper and Associates, Inc. v. City of Cape Coral, 352 So. 2d 1190 (Fla. 2d DCA 1977). In contrast, minor irregularities have included such matters as the submission of a cashier’s check instead of a bid bond, the failure to submit written evidence that agent signing of the owner had authority, and the failure to include a form listing DBE subcontractors, at least where there is an allegation that the form was enclosed but later misplaced. See, e.g., Intercontinental Properties; Asphalt Pavers v. DOT, 602 So. 2d 558 (Fla. 1st DCA 1992). Often ITBs or RFPs will specifically list “Mandatory Criteria” or “Fatal Criteria” in the solicitation document. This listing is not exhaustive of required items. The bid or proposal may still be fatally defective if the bidder or proposer is otherwise not responsive to information and criteria specified anywhere in the RFP or ITB, and the omission meets the test of a material variance from the specification requirements as discussed above.

Improper “Conditional” Proposals. A proposal that is made conditional with respect to material matters such as price must be deemed non-responsive. See Sweeping Corporation of America, Inc. v. FDOT, Case No. 91-8203, 1992 WL 881039 (DOAH March 24, 1992; FDOT April 30, 1992) at ¶¶ 10-11 and 38-39 (holding that letters submitted that were conditional and equivocal with respect to a bond requirement required that the proposal be deemed non-responsive). This problem arises where a vendor includes a response that makes its proposal contingent upon some specification that is not expressly stated in the RFP or ITB.

“Non-Responsible Bidder” Issues. A vendor’s bid or proposal must not only be responsive, but the vendor itself must also be a “responsible” bidder. Responsible bidder requirements are typically spelled out in the ITB or RFP or by controlling statute, rule or policy. Section 287.012(24) defines a “responsible vendor” as “a vendor who has the capability in all respects to fully perform the contract requirements and the integrity and reliability that will assure good faith performance.” Generally, a bidder can be disqualified as non-responsible for a variety of reasons including such matters as: lack of required qualifications, lack of necessary resources and experience, financial inability or insolvency, submitting false statements in bids, delinquencies on prior contracts, failure to meet applicable pre-qualification requirements, failure to possess required certifications, and the like. Typically these type requirements cannot be satisfied post-bid opening. City of Opa Locka v. Trustees of Plumbing Industry Promotion Fund, 193 So. 2d 29, 32 (Fla. 3d DCA 1966).

Pricing and Performance Issues Showing “Non-Responsible Bidders. In unusual cases, a low bid may be “too good to be true” and various factors may indicate that the bidder cannot perform. A public entity is not necessarily required to accept the lowest dollar bid, but instead may bypass the “lowest bid” if that bidder or the bid itself is not “responsible.” See, e.g., City of Pensacola v. Kirby, 47 So. 2d 533, 535 (Fla. 1950) (statute requiring award to “lowest responsible” bidder does not require agency to award contract to the “lowest dollars and cents” bidder); Couch Construction Co. v. State DOT, 361 So. 2d 184 (Fla. 1st DCA 1978); Mayes Print Co. v. Flowers, 154 So. 2d 859 (Fla. 1st DCA 1963). The “responsible bidder” requirement vests discretion in the public authority to determine whether the lowest bidder is in fact also the lowest responsible bidder by considering various performance related factors including such matters as facilities available, financial resources and ability, experience, quality of previous work, reputation for performance, judgment and skill, outstanding obligations, integrity and credit, pecuniary ability, and various other matters relating to the ability of the bidder to perform the contract. See, e.g., Duboise Const. Co. v. City of South Miami, 108 Fla. 362, 146 So. 833 (1933); Engineering Contractors Assoc. of South Florida, Inc., 789 So. 2d 445, 451 (Fla. 4th DCA 2001). Analogous federal authorities likewise illustrate that a public entity may consider performance, financial, and other factors, including whether a bid is abnormally low, unrealistic, or a “low-ball” offer, or otherwise made without adequate resources so as to create risk that the contractor will abandon or short-change performance. The federal decisions have termed this a “price realism analysis” and is used to make a “responsibility” determination, a performance risk assessment, or an analysis of whether the offeror understands the work. See, e.g., Information Sciences Corp. v. United States, 73 Fed. Cl. 70, 100-103 (U.S. Ct. Fed. Claims Sept. 19, 2006).

Non-Existing or Improperly Named Bidder as “Non-Responsible” Bidder. In general, a contract cannot be awarded to a nonexistent entity, since no entity would be bound to perform the work. Oklahoma County Newspapers, Inc., Comp. Gen. Dec. B-270849, 96-1 CPD 213, 1996 WL 225730 (May 6, 1996). Similarly, if a bidder’s corporate charter has been dissolved, it lacks legal capacity to contract, and so cannot be awarded the bid. Casper Const. Co., Inc., Comp. Gen. Dec. B-253887, 93-2 CPD 247, 1993 WL 437055 (Oct. 26, 1993). If a proposal is ambiguous on the identity of the offering entity, the offer will be unacceptable, since there is uncertainty as to exactly who is bound to perform the contract. B & L Services, Inc. v. Dept. HRS, No. 85-3294BID, 1986 WL 401534 at ¶ 9, 34, & 37 (DOAH June 4, 1986). Such ambiguous bids are nonresponsive because they do not exhibit an intent of the bidder to be bound by the terms of the contract and this directly impacts the price, quantity, quality and delivery of the solicited products. Honeywell, Inc. v. United States, 16 Cl. Ct. 173, 35 Cont. Cas. Fed. (CCH) ¶ 75,611 (U.S. Cl. Ct. 1989), rev. on other grounds, 870 F. 2d 644 (Fed. Cir. 1989); Griffin Const. Co., B-185790, 76-2 CPD ¶ 26, 1976 WL 13110 (July 9, 1976) (award of contract to an entity other than that named in the bid constitutes an improper substitution of bidders). Moreover, it is improper to substitute bidding entities after bids have been submitted. For example, in Mil-Tech Systems, Inc. v. United States, 6 Cl. Ct. 26, 28, 31-35 Cont. Cas. Fed. (CCH) 72,719 (U.S. Cl. Ct. 1984), the court held a bidder could not transfer all of its stock to another company where the only assets of the bidder’s company was the awarded bid because such transfer of stock under those circumstances was tantamount to an illegal substitution of the bidder and constitute improper “bid brokering.” Similarly, a bid is nonresponsive if the legal entity on the bid is different than the legal entity identified on the bid bond.

Bias, Improper Conduct, or Ethical Violations of Evaluation Committee. Bias, favoritism, or unethical conduct on the part of the evaluation committee is a frequent successful ground for protests. Even the potential appearance of a conflict of interest can qualify. See, e.g., Compass Environmental, Inc. v. Department of Environmental Protection, Case No. 05-0007, 2005 WL 678870 at ¶¶ 46-55, 77 (DOAH March 21, 2005) (holding evaluators properly removed due to potential appearance of conflict, and holding that it was unnecessary to show “hard fact” evidence of actual bias or favoritism) (DEP Apr. 19, 2005 reversing on other grounds); Transportation Management Servs. of Broward, Inc. v. Commission for the Transportation Disadvantaged, Case No. 05-0920, 2005 WL 1210021 (DOAH, May 20, 2005) (appearance of impropriety); Medco Behavioral Care Corporation v. State of Iowa Department of Human Services, 553 N.W. 2d 556 (Iowa 1996) (holding appearance of conflict of interest sufficient to nullify proposed contract award). There are also numerous Attorney General opinions and Ethics Commission opinions interpreting state ethics laws in procurement settings. See, e.g., Op. Att’y Gen. Fla. 74-159 (1974) (members of county aviation authority were public officers prohibited from being interested in public contracts in which they are party to the letting); Commission on Ethics Opinion (CEO) 01-4 (Mar. 20, 2001) (prohibited conflict of interest for City Commissioner to remain employee of tax-exempt community development corporation that contracts with the City).

Arbitrary Scoring and Evaluation Errors and Methodologies. So long as acting in good faith, public agencies have broad discretion in procurement matters. This is especially true when it comes to scoring and evaluation issues. Thus it is especially difficult to convince a court to re-score or re-evaluate. Nevertheless, some common examples of such challenges to consider include clear mathematical errors made by scorers, evidence that the scoring system itself is illogical or arbitrary, a clear statistical bias in a particular evaluator’s scoring when compared with other evaluators, failure of evaluator to sign conflict of interest forms, improper ex parte communications between evaluators as to scores, unqualified or inexperienced evaluators, and an evaluator’s failure to follow agency or bid document procedures. For example, if there are no weights assigned for the various criteria of an RFP, or the weights are applied inconsistently or irrationally, this can be a basis for challenge including on the basis that it prevents “an opportunity for an exact comparison of bids” as required by Wester v. Belote, 138 So. 721, 723-24 (Fla. 1938).

Consideration or Weighing of Criteria Beyond the Four Corners of the RFP. Evaluators are generally not to look outside the RFP criteria, or outside the proposals submitted, or base scoring on external information outside of the RFP and evaluation process when conducting their reviews of the submitted proposals. Aurora Pump v. Gould Pumps, Inc., 424 So. 2d 70 (Fla. 1st DCA 1982) (agency must evaluate the bids or proposals received solely on the criteria stated in the RFP); R. N. Expertise, Inc. v. Miami-Dade County School Board, et al., Case No. 01-2663, 2002 WL 185217 (DOAH: Feb. 4, 2002; F.O. Mar. 14, 2002).

Improper POST-Bid Submissions. No submissions made after the bid or proposal opening that amend or supplement are to be considered by the agency. Thus a bidder cannot change a bid after the bid has been opened, except to cure “minor” irregularities. Harry Pepper & Assoc. v. Cape Coral, 352 So. 2d 778 (Fla. 1st DCA 1981).

Post-Award Changes; Improper Bid Shopping. Solicitation documents often require that subcontractors be listed and identified at the time of proposal submission. Failure to identify all subcontractors as required by an RFP is grounds for challenging a proposal as invalid. See, e.g., E.M. Watkins & Company, Inc. v. Board of Regents, 414 So. 2d 583, 587 (Fla. 1st DCA 1982) (“dangers” of bid shopping); D. E. Wallace Construction Corp. v. Florida Board of Regents, No. 89-6844BID, 1990 WL 749710 at ¶¶ 24-29 (DOAH Feb. 26, 1990; F.O. March 30, 1990) (bidder failed to use correct list of subcontractors form and did not submit its proposed MBE participation plan until seven days after bid opening, thus bid was non-responsive). An RFP or ITB that allows a party to submit a bid or proposal for work that will be substantially conducted by subcontractors, without a requirement to identify the subcontractors, and provide proof of ability to perform at the bid price is certainly a situation making the RFP or ITB subject to a timely challenge. Again, the challenge must be brought within 72 hours of the issuance of such an RFP or ITB or the issue will likely be waived.

The Formal Hearing Process

Generally. Once the protest is filed, and assuming there are disputed issues of fact, the agency refers the matter to Florida’s Division of Administrative Hearings (DOAH) for an expedited formal hearing before an administrative law judge (ALJ) pursuant to the detailed provisions of Section 120.569 (decisions affecting substantial interests), Section 120.57 (additional procedures), and Section 120.57(3) (additional requirements as to hearings involving bid protests).

Right to a Hearing: Issues can sometimes arise as to whether a fair hearing under Section 120.57(1), Florida Statutes, is required. Examples would include solicitations by a local government that involve expenditure of state funds; solicitations by a state contractor for subcontractors that will be funded with state funds; or solicitations by other organizations or bodies that have accepted state or federal funding or grants, and have made themselves subject to the public procurement processes. Even in situations where a Section 120.57 hearing is not required, fundamental due process would demand that a hearing be made available that includes adequate notice and a right to be heard. The sufficiency of the process being offered by a local government agency is often the subject of legal challenge. An aggrieved party can always seek relief in circuit court if being denied the opportunity for a full and fair hearing.

Expedited Nature. Section 120.57 hearings are de novo and are expedited in the sense that: a final hearing must be conducted within 30 days of DOAH’s receipt of the formal protest; a recommended order is to be issued by the ALJ within 30 days after receipt of the hearing transcript; and a final order is to be issued by the agency within 30 days of the recommended order. However, these time periods can be waived by agreement of the parties and in complex cases this is often the case, although the prevailing vendor may insist on the statutory time periods.

Pre-Hearing Discovery and Other Procedures. Pre-hearing procedures and rights are similar to civil non-jury trials. The rules are found in Chapter 128-106 Fla. Admin. Code. Among other things, these rules incorporate the discovery rules and procedures from the Florida Rules of Civil Procedure. Accordingly, the broad arsenal of discovery including written discovery (interrogatories, requests for production, requests to admit) and depositions are commonly utilized.

Burden and Standard of Proof. In bid protests where an award has been made, the administrative law judge (ALJ) is required to conduct a de novo proceeding to determine whether the agency’s proposed action is clearly erroneous, contrary to competition, arbitrary or capricious, or contrary to the agency’s rules or policies, or the bid or proposal specifications. The standard of proof in these proceedings is whether the proposed agency action was clearly erroneous, contrary to competition, arbitrary, or capricious. However, a lower standard of review applies where the agency has rejected all bids – such a decision will be overturned only if the agency’s action is illegal, arbitrary, dishonest, or fraudulent. § 120.57(3)(f), Fla. Stat.

Hearing and Post-Hearing Process. The hearings are full evidentiary hearings that will typically take 1-3 days. In highly complex procurements the hearings can sometimes last for a week or more. Following the hearing, proposed recommended orders are submitted generally within 30 days. These PROs are lengthy detailed documents that outline proposed findings of fact based upon the evidence presented in the hearing, as well as proposed conclusions of law, and a recommendation. The ALJ then considers the PRO submitted by each party and issues a recommended order to the agency. The recommended order will include the ALJ’s findings of fact and conclusions of law and an ultimate recommendation on whether to award the contract to a particular vendor, to return all bids and proposals to the agency to be re-evaluated, or to reject all bids and proposals.

The parties then have 15 days to file exceptions to the recommended order with the agency. The agency is bound by the findings of fact, unless there is no competent substantial evidence in the record to support the ALJ’s findings. The agency can only change a conclusion of law if it is on a matter that is within the agency’s specialized knowledge or expertise, and the agency’s conclusion is as reasonable or more reasonable that the conclusions of the ALJ. The agency issues its final order either accepting in whole or part the ALJ’s recommended order. The agency’s FO is subject to judicial review via appeal to the District Court of Appeal.

The deadline is looming to challenge AHCA’s preliminary Decisions. March 16, 2015, is the final day for competing CON Applicants to file challenges to AHCA’s State Agency Action Reports (“SAAR”). Existing Providers wanting full party status to challenge preliminary decisions should also file challenges by March 16, 2015. AHCA’s preliminary decisions that are not challenged by March 16, 2015, will become final and the preliminary approved Applicants will be issued CONs.

If a challenge is filed by a substantially affected party demonstrating that there are material disputed issues of fact, the matter will be referred to the Division of Administrative Hearings (“DOAH”) and assigned to an Administrative Law Judge (“ALJ”) for a quasi-judicial proceeding (“Final Hearing”). At the Final Hearing, AHCA’s preliminary decision is not entitled to any deference. The Applicants have the burden of proving the information contained in their CON Applications, and the Florida Evidence Code is applicable, with limited exceptions such as a more lenient rule on admissibility of hearsay evidence. For more information on the DOAH Final Hearing process, see our newsletter published February 11, 2015, posted at: http://smithlawtlh.com/update-on-return-of-nursing-home-con-in-florida/.

DISTRICTS RIPE FOR CHALLENGES

At this point, any area where there is a pending CON approval is an opportunity for a legal challenge. Basis for challenges are unlimited and can include any combination of factors, such as a better fit for the market, technical flaws in a CON Application, under or over filling the gap in need demonstrated by the fixed need publication, etc.

The chart below indicates sub-districts where AHCA’s preliminary approvals were less than the published fixed need determinations, which is one basis to argue a different provider or combination of providers might be a better fit.

Sub-district

Deficit/Surplus

1-1

40 Bed Surplus

3-2

60 Bed Surplus

4-4

47 Bed Surplus

5-2

56 Bed Surplus

7-4

78 Bed Surplus

8-5

40 Bed Surplus

WHO CAN CHALLENGE

Existing Providers in the same district or competing CON Applicants in the same sub-district can challenge the preliminary decisions. Once challenged, an approved CON Applicant should challenge the other CON Applicants in their sub-district within 10 days of the Notice of Litigation being filed in the Florida Administrative Register, or they could be left merely defending their approval without being able to raise flaws in competitors’ CON Applications.

UNCERTAIN APPLICANTS AND PROVIDERS SHOULD CHALLENGE

With March 16, 2015, rapidly approaching, many CON Applicants and Existing Providers may not have had the opportunity to fully comprehend the potential implications of AHCA’s preliminary decisions. If you are in this position, it is best to go ahead and file a challenge. A challenge can always be dismissed if you decide not to proceed, but if you miss the opportunity to challenge, you may have missed the only window of opportunity.

In some instances, denied CON Applicants have been able to reach settlements that resulted in their approval in addition to the approval of the preliminarily approved Applicant. In other instances, denied CON Applicants have been able to recoup some of their costs through settlements.

Existing Providers may have enhanced reasons to participate in challenges to avoid settlements that allow multiple approvals of preliminarily denied Applicants in addition to preliminarily approved Applicants. While this potential is always present in CON cases, it seems particularly likely in this batching cycle because there are so many potential sub-districts that may have litigation, several sub-districts have more fixed need for beds than have been preliminarily approved, and the Legislature has predetermined a limited window for the total number of beds that will be approved statewide before the moratorium is reactivated, and this number may be reached before need is triggered in the specific sub-district at issue in the future.

Further, a recent circuit court case provides additional reasons why Existing Providers should stay engaged in the process. In that case, a preliminarily denied CON Applicant challenged its denial. There was no competing CON Applicant. AHCA settled and approved the CON, including giving the CON Applicant several years beyond the time where the CON should have expired to begin construction. Several years later, when the project was about to commence construction, the Existing Provider tried to challenge the CON arguing it should have expired 18 months after it was issued, instead of several years after it was issued. The circuit court held the Existing Provider waived its rights to challenge by not filing a challenge within 21 days, even though the Existing Provider had no reason to assume AHCA would have extended the CON for several years beyond the statutory validity period. This case stands for the position that if an Existing Provider fails to challenge a CON, it could be strapped with far reaching consequences.

CONCLUSION

March 16, 2015, is an important deadline to file challenges to AHCA’s preliminary approvals. Failure to timely file a challenge could waive your rights to any future challenges, even if the litigation ultimately results in settlements that go beyond expectations.

Geoffrey D. Smith is a shareholder in the law firm of Smith & Associates, and has practiced in the area of health care law and CON regulation for over 20 years.

Today in the Middle District of Florida, Manny Film, LLC, owners of the movie ‘Manny’ about boxer Manny Pacquiao, filed three John Doe lawsuits. This company has already filed 46 John Doe lawsuits across Florida and it is expected that more are on the way. These three represent the latest in the movie industries attempt to punish people who infringe their copyrights via BitTorrent.

These lawsuits are ‘John Doe’ lawsuits because, at this time, the copyright holder does not know the name of the party they are accusing of infringement. Right now, all they know are the accused infringer’s IP address. From here, they copyright holders will subpoena the ISPs to determine who had the IP address at the time of the alleged infringement. Once that is determined, the copyright holders will update the lawsuits to name the correct individual.

Fortunately, most ISPs inform users before they give up their information. If you receive a letter informing you that you are the subject of a John Doe lawsuit, you should contact an attorney immediately. Damages in a copyright infringement suit are determined by statute and, if willful infringement is shown, can be as much as $150,000.00 per infringement plus opposing counsel’s attorney fees and costs. It is imperative that you act quickly to protect your rights.

At Smith & Associates, we not only understand litigation and copyright law, we understand the technology at the heart of these issues. We understand BitTorrent and the issues associated with associating an IP address to an individual. If you need help addressing this or any other copyright issue, please contact us for a free consultation.